Strategic bids in liberalized markets

This paper presents results of a study concerning the generation strategic bids for a single hour. In this study we incorporated the price and quantity bids. We considered an elastic demand curve, approximated by an affine function, assuming that there is consumer´s reaction and that the market price and the demand are related. Also, we consider the competitors reaction using a parameter that represents the conjectural variation. We studied the market behaviour assuming that the market price is represented by a normal probability function. We studied and compared the market behaviour for two price markets types: the MCP (Market Clearing Pay) and PAB (Pay As Bid).